AMD amends wafer deal with Globalfoundries

AMD has amended its wafer supply agreement with Globalfoundries. The companies agreed on purchase commitments for 2014 and established fixed pricing which will apply to AMD products churned out by the foundry.

"Under this amendment AMD expects to pay Globalfoundries approximately $1.2 billion in 2014. These purchases contemplate AMD’s current PC market expectations and the manufacturing of certain Graphics Processor Units (GPUs) and semi-custom game console products at Globalfoundries in 2014," the companies said.

AMD says the new deal will not impact its 2014 financial goals, including its gross margin.

AMD CEO Rory Read said the amended agreement demonstrated the continued commitment from both companies to strengthen their business relationship and long-term strategic partnership.

"This latest step in AMD’s continued transformation plays a critical role in our goals for 2014,” he said.

The agreement does not change much, it merely reiterates AMD's commitment to using GloFo's services. However, it does bring up GPUs and semi-custom console parts, which could be bad news for TSMC in the long run. Still, this was not unexpected - in fact many industry watchers expected GloFo to get a slice of AMD's GPU business years ago.